Sept. 24 (Bloomberg) -- COFCO Corp., a Chinese state-owned
company, will sell commercial properties to a Hong Kong-listed
affiliate in exchange for shares, in a HK$14.2 billion ($1.8
billion) transaction that creates a larger entity and provides
access to a broader pool of investors.

Hong Kong Parkview Group Ltd., 69 percent owned by a unit
of COFCO, will buy stakes in companies that hold assets in
Chinese cities including Beijing and Chengdu, it said today in a
filing to the Hong Kong stock exchange. It will sell as many as
2.3 billion shares to investors to raise funds for the purchase,
Parkview said.

Chinese developers are looking for ways to get financing at
lower costs as the government has been restricting their access
to capital. Greenland Group, another state-owned enterprise, in
August took a 60 percent stake in Hong-Kong-listed SPG Land
Holdings Ltd. and placed a number of Chinese projects in the
entity.

“Chinese developers are trying to list in Hong Kong,”
said Alan Jin, a Hong Kong-based property analyst at Mizuho
Securities Asia Ltd. “It can cut down their financing costs a
lot. An initial public offering ‘‘would take a lot of time with
high costs.’’

Shares of Parkview dropped 8 percent to HK$3.68 at the
close of trading in Hong Kong. They climbed as much as 16
percent earlier. The Hang Seng Property Index ended the day 1.6
percent lower.

Parkview is majority owned by Achieve Bloom, which is
indirectly wholly owned by COFCO Corp. Should investors not take
up the shares offered, COFCO will receive stock that will give
it 98 percent of Parkview, Parkview said in the statement. If
investors do take up all the shares then COFCO will have a 75
percent stake in Parkview.

Company Renamed

The expanded company ‘‘will become the overseas listed
platform of COFCO Corporation, holding its mixed-use complexes
as well as other commercial properties,’’ Parkview said.

COFCO Corp. is China’s largest grains trader and owns
stakes in China Foods Ltd., China Agri-Industries Holdings Ltd.
and China Mengniu Dairy Co. It owns shopping malls in cities
including Beijing and Shanghai and hotels such as the St. Regis
in Sanya, on China’s southern island of Hainan.

After the deal is completed, Hong Kong Parkview will change
its name to COFCO Land Holdings Ltd. and will hold commercial
properties in Beijing, Shanghai, Hong Kong and other Chinese
provinces such as Sichuan and Hainan, it said.

China hasn’t approved refunding plans by developers listed
on the Shanghai and Shenzhen exchanges since April 2010 in an
effort to guard against a market bubble, according to an Aug. 2
report by Haitong International Securities Group Co.